Redbox Produced In the U.S. Using Lean

As I continue to focus on manufacturing here in the U.S. this week, I thought I would combine two of my favorite things…..Lean and movies. An international company, Flextronics, has a manufacturing plant in Creedmoor, NC. This plant produces the Redbox movie dispensing machines that are popping up all over the U.S. It is a small facility that is using lean.

The 250 employees led by general manager John Mainey use the Six Sigma Lean manufacturing techniques designed to cut waste, reduce excess effort, address defects and keep the assembly line moving.

Mr. Mainey seems to be a believer in keeping manufacturing in the U.S.

He contends that American manufacturing declined as firms compared production costs in the United States with production costs in locales like China and Mexico, couldn’t see how to reduce spending — much of it related to labor — threw up their hands and said, “We’ll just send it overseas.”

Instead, manufacturers need to “apply Lean and eliminate waste. Recognize that labor is just one cost, and that they must be flexible. If we can do this, then manufacturing will stay here in the U.S.,” said Mainey.

I’m glad to see that Flextronics sees the total cost picture. The most intriguing part of Flextronics is they are an international company so doing the manufacturing overseas can be done very easily. Instead, they see the value in producing the product where the product is used. Therefore, the manufacturing plant is in the U.S. in North Carolina.

I can’t claim to know this is what they are thinking by deciding to producing the redbox units in the U.S. But it seems like at least part of the equation, since the Creedmoor plant’s parent company is based in Singapore.

The Creedmoor plant is one small part of Flextronics, a massive Electronics Manufacturing Services (EMS) firm based in Singapore with 160,000 employees in 30 countries.

The plant is focused on reducing waste with the production of each individual redbox unit. The unit is produced on an assembly that moves at 4 inches per minute.

Workers use the supplies in the cart to assemble their portion of the kiosk, constantly referring to a station video monitor that details steps for that station. While steps may be memorized over time, the monitor is necessary because workers shift from station to station and the process changes, says Mainey.

“The monitor reinforces the steps for me,” said Sharon Estes, an assembly line worker. “I’ve worked at seven stations in the last year. I couldn’t possibly remember all the steps for each.”

It sounds like the cart is a kitting tool to make sure the kiosk gets all the right parts. The assembly line worker also states another great reason for standardized work…job rotation. The Creedmoor plant rotates employees and the standardized work is there as a reminder as to what tasks need to be performed at that station.

“We’ve been doing the redbox for five years. We still look at ways to improve. There’s no end state,” said Mainey.

Sounds like Mr. Mainey is driving the plant to continually improve. I hope Flextronics keeps with this thinking and lets the Creedmoor plant prove you can reduce total costs while paying higher wages.

Matt – Just curious… Do you know how Redbox is doing financially? I would imagine that all the streaming available online, along with Netflix, etc. would make this a pretty competitive business to stay successful in. They’d certainly need to be pretty flexible in their approach with the way technology is changing so quickly…

I don’t know how they are doing financially. I do know Redbox and Netflix are the big cause of Blockbuster’s demise. Plus, Blockbuster wants to keep with their old store model. The Redboxes in my area always have people getting movies from them. The selection isn’t as great as Netflix, but if you don’t watch a lot of movies, it is very cost effective.

I am so proud this is a NC manufacturer, and I too hope they can continue their improvements. After our (NC State Industrial Extension Service) Manufacturing Makes It Real tour throughout NC last week, we heard many similar stories of manufacturers trying hard to keep their plants in NC and very proud of being NC manufacturers. Several told of sourcing locally for their supply chains. Great story for Manufacturing Week! http://mfgmakesitreal.ies.ncsu.edu